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Asia Pacific: Tax update for financial institutions (October 2017)

Asia Pacific: Tax update for financial institutions

The multilateral instrument (MLI) to implement tax treaty-related measures to prevent base erosion and profit shifting (BEPS) was signed in June 2017 by many countries in the Asia Pacific region, and this convention may further complicate the application of tax treaties for many taxpayers. Other BEPS-related changes are expected.


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Read an October 2017 report [PDF 1.36 MB] prepared by the KPMG member firm in China: General tax update for financial institutions in Asia Pacific


Among the items reported in this edition are the following developments:

  • Australia: A new “major bank” levy, proposed anti-hybrid rules for regulatory capital, compliance guidelines concerning the use of internal derivatives by multinational banks 
  • China: Notices on value added tax (VAT) policies on asset management products, on tax incentives for small loan companies, and on pilot taxation policies of venture capital enterprises and individual “angel” investors; new administrative measures on due diligence verifications on tax-related information of non-residents’ financial accounts
  • Hong Kong: Expanded list of reportable jurisdictions for 2017 under the common reporting standard (CRS); aircraft leasing tax incentive; profits tax exemption for privately offered open-ended fund companies
  • India: Draft notification for exemption from long-term capital gains tax
  • Indonesia: Use of tax book value on the transfer of assets for business mergers, consolidation, expansion or acquisition
  • Korea: Intergovernmental agreement (IGA) allowing the exchange of country-by-country reporting signed with the United States; court case addresses VAT on the management or disposal of trust assets
  • Malaysia: Income tax exemption order, a tax audit framework, and practice notes for withholding tax
  • Mauritius: VAT reverse-charge mechanism applicable on non-VAT registered payers
  • New Zealand: Budget 2017, and update to the income tax treaty with Hong Kong allows for the automatic exchange of information
  • Philippines: Additional “personal equity retirement account” (PERA) unit investment trust funds (UITFs) and investment products; clarification of capital gains tax on sales, exchanges or other dispositions of real property
  • Singapore: Revisions to the “finance sector investment” and Asian bond grant schemes
  • Taiwan: Amendment to securities transaction tax

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